Cement giant Lafarge admits 'unacceptable errors' in Syria after funding armed groups

The Swiss-French cement company LafargeHolcim should have stopped its operations in war-torn Syria before it did, its chairman said in an interview on Sunday, after three top executives were charged with indirectly financing the Islamic State and other militant groups.

Lafarge is accused of paying the Islamic State group and other militants through a middleman in order to allow the company's factory in Jalabiya, northern Syria, to continue to operate.

It is also suspected of using fake consulting contracts to buy fuel from the Islamic State group, which took control of most of Syria's strategic oil reserves in June 2013.

Lafarge began operating in the northern Syrian town of Jalabiya in October 2010 at an investment of $680 million - the biggest outside the oil industry.

Beat Hess told French daily Le Figaro that the group was going through "a difficult phase" that was "a problem for the company's reputation".

"Unacceptable errors were made which the company regrets and condemns," Hess said, adding that Lafarge "probably pulled out of Syria too late".

Frederic Jolibois, who took over as manager of the Syria factory in 2014, has been charged with financing terrorism and violating an EU embargo on Syrian oil.

Bruno Pescheux, Jolibois' predecessor as factory chief between 2008 and 2014, and Lafarge security boss Jean-Claude Veillard were also charged with financing terrorism as well as "endangering others' lives".

Hess, who became chairman of the company in May 2016, said that he had "full confidence" in the French legal system, and that "if we can help, we will do so".

To ensure protection of its staff, Lafarge Cement Syria (LCS) paid between $80,000 and $100,000 a month to various armed groups, including $20,000 to IS, according to a source close to the investigation.

The funds went through a middleman, Syrian tycoon Firas Tlass, who was a former minority shareholder in the cement works, Bruno Pescheux, who ran the plant from 2008 to 2014, told investigators.

Lafarge's bosses in Paris are suspected of having approved payments by LCS through "false accounting documents".